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Today’s Market View – Renascor Resources Ltd, KEFI Minerals, Condor Gold and more…

SP Angel . Morning View . Tuesday 17 12 19

Copper prices break over $6200 as LME stocks draw down

UK stocks pull back on no deal Brexit concerns

MiFID II exempt information – see disclaimer below

Ariana Resources (LON:AAU) – Kiziltepe resource drilling

Condor Gold (LON:CNR) – Sale of the Poterillos concession

Eurasia Mining (LON:EUA) – Monchetundra Flanks license update

KEFI Minerals* (LON:KEFI) – Tulu Kapi funding update, award of 1,200km2 exploration license and a £1.9m equity placing

Renascor Resources Ltd (ASX:RNU) BUY – Valuation A$0.09/s – Siviour graphite DFS demonstrates value – Initiation note

Talga Resources* (ASX:TLG) – Valuation: A$1.80 – Talcoat Commercial Graphene coating trial on cargo ship

On the 12th day of Christmas Labours leader said to me:

Twelve crippling tax rises

Eleven acts of anti-Semitism

Ten million Labour voters

Nine years in opposition, another five to come

Eight defections to the Lib Dems

Seven defections to Independent Group

Sixty nine seats lost

Five Zionist plots

Four Brexit excuses

Thirty seven million stupid voters got it wrong according to Labour

Two nationalised industries

One new Socialist leader required very quickly

Dow Jones Industrials +0.36% at 28,236

Nikkei 225 +0.47% at 24,066

HK Hang Seng +1.22% at 27,844

Shanghai Composite +1.27% at 3,022

FTSE 350 Mining +0.33% at 18,951

AIM Basic Resources +0.27% at 2,030

Economics

China – Economic growth slow down paused in November as US and China grow closer to striking the phase one deal, the data released yesterday morning showed.

Investments and industrial production stabilised last month posting 5.2% and 5.6% increases YTD, unchanged from the previous month.

Retail sales growth rates were off but only marginally (8.0% v 8.1% in October YTD, but in line with expectations).

EU – Car registration growth came off to 4.9%yoy in November v 8.7%yoy recorded in the previous month.

While the rate compares favourably to the rest of the year and H2/18, YTD sales are still slightly off (-0.3%yoy).

US – PMI measures of business activity held up well through December posting a slight increase and hitting a 5-month high.

New orders, employment, inflation and business outlook all picked up this month which is likely to further strengthen amid positive US/China trade deal negotiations.

“The brighter news needs to be caveated, as the overall rate of economic expansion signalled by the surveys remains well below that seen this time last year, commensurate with GDP rising at an annualised rate of just over 1.5%… the upward trajectory in the surveys is on course to see another year of above—potential GDP growth of approximately 2.2% in 2020,” Markit commented on data.

US homebuilders confidence rises to highest level since June 1999 (Reuters)

The National Association of Home Builders/Wells Fargo Housing Market Index rose 5pts to 76 in December

Prospective buyer interest and current sales conditions also saw their best levels since the 90s.

Confidence and sales is being driven by three successive rate cuts, healthy wage growth and strong jobs numbers.

The latest reading arrives as a trio of Federal Reserve rate cuts pushed mortgage costs lower through the end of the year. The latest jobs data also pointed to the US labor market remaining strong amid trade tensions and a lagging manufacturing sector.

"Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market," NAHB Chair Greg Ugalde said in a statement.

The year-end surge further establishes the housing sector as "the hottest part of the whole economy," Pantheon Macroeconomics Chief Economist Ian Shepherdson said Monday. Homes are many Americans' biggest investments, and the December data signals healthy demand to continue into the new year.

"The consensus was inexplicably soft, given the rising trend in mortgage demand, but this is way better than we dared to hope," Shepherdson said, adding that he expects "further increases in sales and construction activity over the next few months, at least.".

India – Monetary, Fiscal Policy not enough to pull India out of Great Slowdown according to Subramanian and Felman (Bloomberg Quint)

Currencies

US$1.1137/eur vs 1.1130/eur last week. Yen 109.61/$ vs 109.48/$. SAr 14.399/$ vs 14.471/$. $1.322/gbp vs $1.336/gbp. 0.685/aud vs 0.692/aud. CNY 6.999/$ vs 7.004/$.

Sterling pulled back 1.1% against the US$ this morning on the news that PM Johnson is not planning the extension of the 2020 deadline for the Brexit transition period fuelling concerns of a no-deal scenario.

Commodity News

Gold US$1,478/oz vs US$1,476/oz last week – Gold on track for biggest annual rise in nine years (MarketWatch)

The price of gold is on track to end the year more than 15% higher, which would be the biggest annual climb in nine years.

Gold has seen considerable safe haven buying, from investors concerned over low and negative yields in the bond market, along with ongoing macroeconomic and geopolitical uncertainties.

Prices settled at $1,481/oz on Friday, up 15% y-t-d. That would make the largest yearly rise since 2010, when prices climbed nearly 30%.

Gold ETFs 80.9moz vs US$80.9moz last week

Platinum US$930/oz vs US$933/oz last week

Palladium US$1,994/oz vs US$1,959/oz last week – Palladium eyes $2,000/oz mark (Reuters)

The price of palladium is set to break the $2,000/oz mark for the first time, after hitting an all-time peak of $1,998.43/oz earlier.

Prices have increased due to Southern African mines limiting operations due to power shortages, along with continued strong demand for its use in autocatalysts.

Silver US$17.07/oz vs US$16.99/oz last week

Base metals:

Copper US$ 6,207/t vs US$6,179/t last week

Aluminium US$ 1,771/t vs US$1,767/t last week

Nickel US$ 14,190/t vs US$14,180/t last week

Zinc US$ 2,307/t vs US$2,261/t last week

Lead US$ 1,900/t vs US$1,892/t last week

Tin US$ 17,250/t vs US$17,285/t last week

Energy:

Oil US$65.4/bbl vs US$65.3/bbl last week

Natural Gas US$2.321/mmbtu vs US$2.296/mmbtu last week

Uranium US$25.55/lb vs US$25.55/lb last week

Bulk:

Iron ore 62% Fe spot (cfr Tianjin) US$92.5/t vs US$93.0/t

Chinese steel rebar 25mm US$575.6/t vs US$581.2/t

Thermal coal (1st year forward cif ARA) US$59.1/t vs US$59.8/t

Coking coal futures Dalian Exchange US$177.8/t vs US$177.0/t

Other:

Cobalt LME 3m US$34,750/t vs US$34,750/t – Tech giants named in US lawsuit over Congolese child cobalt mining deaths (Guardian)

Apple, Google, Dell, Microsoft and Tesla have been named as defendants in a law firm filed in Washington DC by human rights firm International Rights Advocates.

A group of 14 parents and children from the DRC are seeking damages for forced labour, among other human rights violations.

The lawsuit accuses the companies of aiding and abetting in the death and serious injury of children who they claim were working in cobalt mines in their supply chain.

It argues that the companies allowed children to work at mines belonging to Glencore, who sold cobalt to Umicore, who then sold to the accused tech companies.

The suit is the first to target tech companies for their cobalt sourcing practices and raises the pressure on the industry to take stronger action to acquire the metal responsibly (FT).

One of the central allegations in the lawsuit is that Apple, Google, Dell, Microsoft and Tesla were aware and had specific knowledge that the cobalt they use in their products is linked to child labour performed in hazardous conditions, and were complicit in the forced labour of the children.

The DRC produces about 60% of the worlds cobalt, of which approximately a third comes from artisanal miners who dig by hand.

NdPr Rare Earth Oxide (China) US$41,362/t vs US$41,617/t – Colorado rare earth processing plant is first one outside of China (mining.com)

USA Rare Earth and Texas Mineral Resources have opened a pilot plant processing facility in Colorado, which will purify rare earths.

The plant will process heavy rare earths (HREEs) and lithium, along with uranium, beryllium, gallium, hafnium and zirconium.

The plant is the first step in Washington securing domestic supply of the key ingredients for military weapons, electric vehicles and phones.

Building the final plant is expected to cost between $10-12m, and is expected to produce roughly 100kg of REEs by mid-2020.

The companies plan to move the pilot plant to Texas by 2021 and have full-scale production by 2023.

Lithium carbonate 99% (China) US$5,929/t vs US$5,996/t

Ferro Vanadium 80% FOB (China) US$28.5/kg vs US$28.7/kg

Antimony Trioxide 99.5% EU (China) US$5.1/kg vs US$5.1/kg

Tungsten APT European US$235-245/mtu vs US$235-245/mtu

Graphite flake 94% C, -100 mesh, fob China US$540/t vs US$540/t

Graphite spherical 99.95% C, 15 microns, fob China US$2,550/t vs US$2,550/t

Company News

Ariana Resources (LON:AAU) 2.20p, Mkt Cap £23.3m –Kiziltepe resource drilling

Ariana Resource reports results from its recent reverse-circulation resource drilling at Arzu South within the Kiziltepe mine in Turkey where Ariana Resources holds 50% of the Red Rabbit Joint Venture with Proccea Construction.

The drilling has demonstrated “the continuity of the Arzu South mineralised structure at depth which may form the basis for establishing an underground mineral resource. The structure clearly extends to a depth of about 50-100m beneath the bottom of the current open pit”.

Among the results highlighted in todays announcement are:

A 16m wide intersection at an average grade of 3.04g/t gold and 67g/t silver from a depth of 57m in hole KTP-RC02-19 which also contained a 3m wide zone averaging 1.37g/t gold and 20g/t silver from 51m depth as well as a single metre averaging 1g/t gold an 19g/t silver between 75-76m; and

A 3m wide intersection at an average grade of 6.25g/t gold and 129g/t silver from a depth of 54m in hole KTP-RC08-19 which also intersected single metres averaging 3.34g/t gold and 105g/t silver and 1g/t gold and 46g/t silver at 128m and 131m depths.

Todays announcement shows mineralised intervals in several other holes including 2m averaging 3.33g/t gold and 110g/t silver from 98m in hole KTP-RC03-19 and 1m averaging 3.40g/t gold and 195g/t silver from 41m in hole KTP-RC04-19.

Dr. Kerim Sener, Managing Director of Ariana Resources confirmed that the company expects to complete a revised mineral resource estimate for Kiziltepe during Q1 2020 “with a view to identifying opportunities to extend mine life beyond the eight years determined in the Feasibility Study.”

Dr. Sener also said that “We look forward to planning this follow-up drilling and also to undertake a new resource estimate for the Kiziltepe Mine, encompassing areas drill-tested in the past year and including all known veins”.

Conclusion: The recent drilling shows depth extensions to the Arzu South system which may, eventually, support a transition to underground mining at Kiziltepe. In the shorter term, we look forward to the revised mineral resource estimate during Q1 2020.

Condor Gold (LON:CNR) 19p, Mkt Cap £18.0m – Sale of the Poterillos concession

Condor Gold has announced the sale of its Poterillos concession in northern Nicaragua to Mako Miningswholly owned subsidiary, Nicoz Resources for US$600,000 gross (US$555,000 net after tax).

The sale, which is subject to the approval of the Nicaraguan Ministry of Mines and Energy, is expected to be completed by the end of May 2020.

The Poterillos concession comprises 12km2 including the San Albino mine is situated along strike from Mako Minings San Albino gold project which, according to Mako Minings website contains an NI-43-101 compliant resource estimate of 656,000t of indicated resources at an average grade of 7.13g/t gold and 12.7g/t silver (150,000oz of contained gold and 268,000oz of silver) plus an additional 880,000t classified as inferred at an average grade of 6.78g/t gold (192,000oz) and 10.4g/t silver (293,000oz).

Mako Minings website also says that “Construction [at San Albino] has commenced with first gold pour expected by late summer 2020”.

The disposal of the Poterillos concession, which Condor Gold explored “between 2007 and 2009, with a number of channel samples taken on trenches and former mine adits”, underlines the companys focus on its La India gold project in Nicaragua.

La India has already been granted “an Environmental Permit for the development, construction and operation of a processing plant with capacity to process up to 2,800 tonnes per day with capacity to produce approximately 100,000 oz gold per annum from an open pit mineral reserve of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold. La India Project contains a Mineral Resource of 9,850Kt at 3.6 g/t gold for 1,140Koz gold in the Indicated category and 8,479Kt at 4.3g/t gold for 1,179Koz gold in the Inferred category.”

Conclusion: The sale of Poterillos to the developer of an adjacent project provides Condor Gold with additional working capital and should assist management to concentrate their efforts to advance La India where applications were submitted in November to develop high grade feeder pits which would potentially increase output from around 80,000oz pa to 100-120,000oz.

Eurasia Mining (LON:EUA) 2.7p, Mkt Cap £72m – Monchetundra Flanks license update

Application for Monchetundra Flanks license has been approved by the Russian Ministry of Defence and is currently reviewed by SevZapNedra, the regional licensing agency.

Final approval is expected to be received in due course allowing Eurasia to secure highly prospective and adjacent to the Monchetundra project land package.

The exploration license application is for a 8km2 area covering on-strike continuation at both the Loipishnune and West Nittis deposits that form the 1.9moz Monchetundra project.

Historical exploration data together with the regional geological archive suggest flanks may host some ~13moz in additional mineral inventory potentially significantly expanding the scale of the project.

KEFI Minerals* (LON:KEFI) 1.25p, Mkt Cap £13m – Tulu Kapi funding update, award of 1,200km2 exploration license and a £1.9m equity placing

All the updated shareholder and subscription agreements have been distributed to KEFI project partners last week and are expected to be executed this month.

This will bring the release of the first tranche of the ANS Mining funds of $9.5m allowing to commence phase one of the resettlement programme.

The Ethiopian Government is reported to have already been committed to construction of a new road of 111km connecting the Tulu Kapi project with the main highway.

The Company secured 1,200km2 regional exploration license adjacent to Read More – Source